Property investment in Portugal - city analysis rental

[Joao Antonio]

Hello,

I’m currently investing in some units in the village of Sagres (Algarve) and prior to this process, I’ve done a market analysis for the short term rental market, which I have in mind for my properties. I’m sharing the findings here in case it’s useful to someone else:

Units / types of units

Market	Bedroom	Studio	1 Bedroom	2 Bedroom	3 Bedroom	4 Bedroom	5+ Bedroom
491	134	20	118	125	66	25	3

Occupancy rates 2021:

	Market	Bedroom	Studio	1 Bedroom	2 Bedroom	3 Bedroom	4 Bedroom	5+ Bedroom
Av. Occupancy (%)	42%	36%	30%	45%	48%	46%	39%	50%
Av. Revenue (USD)	1,504	642	999	1,245	1,687	2,384	3,634	6,059

Revenue 2021:

		Market		Bedroom		Studio		1 Bedroom		2 Bedroom		3 Bedroom		4 Bedroom		5+ Bedroom
Lowest monthly revenue		478		155		126		299		485		567		838		1,220
Highest monthly revenue		3,702		1,782		2,402		3,261		4,226		5,960		7,581		13,008

Top listings by revenue (2021) by type

Bedroom (USD):

26,267 - www.airbnb.com/rooms/41946699
20,739 - www.airbnb.com/rooms/41933482

Studio (USD):

15,938 - www.airbnb.com/rooms/8772597

15,513 - www.airbnb.com/rooms/43720842

15,505 - www.airbnb.com/rooms/43712535

1 Bedroom (USD)

46,729 - www.airbnb.com/rooms/43712535

41,631 - www.airbnb.com/rooms/44736230

34,878 - www.airbnb.com/rooms/43712535

2 Bedroom (USD)

46,764 - www.airbnb.com/rooms/44740576

46,753 - www.airbnb.com/rooms/27948666

46,568 - www.airbnb.com/rooms/35230483

3 Bedroom (USD)

65,067 - www.airbnb.com/rooms/30168418

62,927 - www.airbnb.com/rooms/30929693

60,572 - www.airbnb.com/rooms/7944597

4 Bedroom (USD)

95,798 - www.airbnb.com/rooms/4614025

78,379 - www.airbnb.com/rooms/21680999

72,150 - www.airbnb.com/rooms/23319248

+ 5 Bedroom (USD)

71,752 - www.airbnb.com/rooms/35859851

53,277 - www.airbnb.com/rooms/5413799

26,563 - www.airbnb.com/rooms/5281704

Other market info

- Average selling price m2: 2.680 EUR

- Average transaction value: 155K EUR

- Average rent (long term) per m2: 4.9 EUR/m2

The numbers were collected from a pricing software that we use to manage the pricing of apart-hotel units we operate.

With this information I was able to calculate the maximum I would be able to pay for property (including works, buying costs, etc), to have an edge for a positive cash on cash return.

Joao Antonio